The Empirical Research Of The Affect Of Risk Investment To The GEM IPO Under-pricing Rate

The GEM(Growth Enterprises Market) plays an important role in Chinese capital market. Compared with main-board market,in the past six years, in the comparatively optional environment, GEM, has provided much richer financing channels for 492 new small and medium-sized enterprise and helped them realize their dream of financing. Since then, Chinese GEM has played an indispensable part in capital market. On the other hand, with the increasing VC investments and the high IPO under-pricing of GEM, more and more VC has invested in IPO, especially the IPO market of GEM. Therefore,researching Chinese IPO has become a hotpot, particularly from the VC perspective.This paper will take the 466 listed companies announced by the(SRC)Securities Regulatory Commission from October 30 th,2009 to December 30 th,2015 as samples and divide these companies into 242 enterprises with the institutions of venture capital participation and 224 enterprises without the institutions of VC participation to do a further research. On the basis of authentication/supervision theory and seeking fame/reversed theory. With these empirical research methods, multiple regression analysis and mean value test, this paper will focus on the research whether the VC institutions participation has an influence on initial market IPO under-pricing rate or not and how it influences. Specially, this paper will focus on two issues about Chinese GEM. First, to analysis the influences with or without VC participation on initial market IPO under-pricing rate. Second, to analysis how the enterprises with VC participation influence the performance of Chinese initial market on the first day.According to the empirical results, the relationship between venture capital and the gem IPO under-pricing rate suits by name/reverse theory. It performance in the following sides:(1)VC participation or not will be impact the gem enterprise’s profit ability;(2)VC participation will give a proportional impact to IPO under-pricing rate;(3)Reputation as an important indicator of VC companies will give the IPO under-pricing rate a negative impact.(4)Issuance, turnover rate, price-to-book reference variables will influence on IPO under-pricing rate plays a role.(5)Degree of IPO under-pricing rate associated with the participate numbers of VC institutions.This paper will give feasibility suggestions and opinions as the empirical results.